9/10/2008 @ 6:05PM

The Highest-Paid Women In Corporate America

Sometimes it pays to look twice; there’s often more than meets the eye. The ForbesLife Executive Woman’s list of the highest-paid women in corporate America is like that.

It’s impressive to see a roster of 100 women that starts at the mistress-of-the-universe level of $120.4 million and descends to a still-flush $3 million. But while the FLEW list can be viewed as a celebration of achievement, it also–and more important–provides new data by which to judge women’s progress.

It could, in fact, change the conversation. The past year could have been remembered as the year a couple of elite Wall Street women–Zoe Cruz, former co-chief executive of
Morgan Stanley
, and Erin Callan, former chief financial officer of
Lehman Brothers
–got their comeuppance in the most public of ways. Their high-profile falls have dominated many female conversations for months, as
Citigroup’s
Sallie
Krawcheck
Sallie Krawcheck
says.

The corporate earners list provides something else to talk about and, parsed in different ways, much to think about.

If, as so many men have often said, money is just a way to keep score, the list is yet another indicator that women aren’t achieving equality at work. U.S. Department of Labor statistics peg the salary gap between women and men at just over 21 cents on the dollar–but at the top, matters seem to be worse. Yes, at least 100 women pulled down $3 million last year, but the 100 best-paid men in corporate America–all chief executives–each pocketed at least $18 million. You don’t need a calculator to figure out that pay divide.

The list also sheds new light on the old criticism that women executives don’t take as many risks as men, which is one excuse given for failing to promote women. Academic literature backs that up for risk-taking in general, even relating it, in one recent University of Cambridge study of financial traders, to testosterone levels.

But what difference–if any–between male and female executives in corporate risk-taking explains why as a woman climbs the corporate ladder she doesn’t get the same rewards as a man?

As Forbes statistics show, the median salary for the 100 chief executives of the largest U.S. companies, who all happen to be men, is about twice the median salary of the 100 highest-paid women, but the median male bonus is almost three times that of women. The comparison is not perfect–not every woman on the list is a chief executive–but more of the male paycheck does seem to be variable, dependent on performance and, therefore, at least partly keyed to taking risks.

Current research in Britain lends credence to that theory. Using data from about 200 companies, and controlling for industry and for executive tenure and age, one study found that male executives who turn around financially lagging companies receive increased rewards in their bonus checks of more than 260%. Women in the same situation can expect a jump of about 4%.

The study, led by Clara Kulich at the University of Exeter, looks at British companies between 1998 and 2004 and was presented at the annual meeting of the Academy of Management, which has members in 92 countries, in August of this year.

If, as the numbers suggest, the risk-reward payoff is substantially lower for women, it’s completely sensible for them to avoid risky strategies because they have little to gain by not playing it safe. It’s even more sensible considering that if one falls–as Cruz and Callan discovered–the intense media coverage invited by the scarcity of women at the pinnacles of corporate America means that everyone will know about it. Worse, many will view them as totems, and their failures as somehow demonstrating that women executives as a whole are deficient.

Kulich and her team conclude that companies simply have lower expectations for women, that they do not believe women influence outcomes as much as men do, and that they are less credible as leaders.

That has dangerous implications for women. Plenty of studies show that expectations affect performance. “Low expectations of women can be as destructive as overt discrimination,” wrote Susan Hockfield, a neuroscientist who is president of Massachusetts Institute of Technology, Shirley M. Tilghman, a molecular geneticist who is president of Princeton University, and John L. Hennessy, a computer scientist who is president of Stanford University, in an essay published a few years ago by the Boston Globe.

At the time, they were tongue-lashing their colleague, then-Harvard president Lawrence H. Summers, who had suggested that women may lack “intrinsic aptitude” for science and engineering. But the principle applies here too.

Low expectations based on external factors like gender or race, rather than on personal skill sets, are particularly pernicious. Ambition depends on belief in oneself, which requires recognition and reinforcement by others.

Fortunately, much research exists demonstrating that stereotypes can be changed by knowledge of examples contrary to them. This suggests an agenda: While it’s important to take note of why Cruz and Callan were pushed out of their companies, it’s more important to make known the successes of women.
Meg
Whitman
Meg Whitman
, recently retired from eBay’s
top slot,
Indra
Nooyi
Indra Nooyi
, the chairman and chief executive of
PepsiCo
, and
Anne
Mulcahy
Anne Mulcahy
, the chairman and chief executive of
Xerox
, are well-known success stories.

But people like
Lynn Laverty
Elsenhans
Lynn Laverty Elsenhans
, who just moved into the chief executive job at
Sunoco
–in the male-dominated oil industry no less–should also be household names. Women need to talk more often (to each other and to men) about Elsenhans–and about
Angela
Braly
Angela Braly
, the president and chief executive of
WellPoint
;
Patricia
Woertz
Patricia Woertz
, the chairman, president and chief executive of
Archer Daniels Midland Company
; and
Paula Rosput
Reynolds
Paula Rosput Reynolds
, the chairman, president and chief executive of
Safeco Corp.
. All these women work in less glamorous businesses ignored in many corners of the media.

Women need to herald, too, the women who head smaller companies and sizable divisions–and not as “firsts.” It’s only when their appointments and achievements are seen as ordinary that perceptions and expectations will change.

Judith H. Dobrzynski, a regular contributor to Forbes Life Executive Woman and formerly the editor of the New York Times Sunday business section, writes frequently on topics concerning the advancement of women in the workplace.